Asia’s ‘thriving tiger’ economies have a chance to be trailblazers in a world disrupted by geopolitics and tech

Hong Kong, Singapore, South Korea and Taiwan have managed to hold their own against developed economies in other regions for decades
However, amid geopolitical fragmentation, game-changing technological advancements and social divisions, they need to adapt quickly

Janet Pau

Published: 5:56pm, 18 Jul 2023

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Only a handful of economies in the world are both rich and have continued to grow, and about half of them are located in Asia. But despite their success, these economies now face significant challenges to further growth and need to find a new path forward.

The four tiger economies of Hong Kong, Singapore, South Korea and Taiwan boast gross domestic product per capita, at purchasing power parity, of above US$50,000. They have also been able to consistently deliver growth rates of almost 3 per cent after they got rich. These thriving tigers have on average maintained high productivity and competitiveness, and relatively low youth unemployment, compared to many developed economies in other regions. Common factors for their success include continued pro-growth policies, flexible labour markets, and upgrading of infrastructure.

But future growth will take place in a world of geo-economic fragmentation, technological disruption, and increasing social divisions. The Covid-19 pandemic has also ushered in more permanent shifts in global supply chains, leading to slowdown in trade and investment that have been key to these economies’ growth models. Risks of economic stagnation, inadequate workforce preparedness for the digital economy, uneven growth, and lack of social mobility are structural issues requiring longer-term solutions.

Governments of the thriving tiger economies have largely been proactive in addressing the skill mismatch between education and work, promoting work-based learning and providing financial incentives to encourage employers to offer apprenticeships and internships. They now need to help skilled workers build lifelong competencies to meet the changing demands of a digital economy.

Singapore’s SkillsFuture and South Korea’s Digital New Deal are examples of coordinated efforts to align talent with the digital economy. Yet the focus on technical competencies is insufficient.

Career pathways also need to include cross-disciplinary knowledge, project management and collaboration skills with both humans and AI, and adaptability and agility in the face of a changing global environment. As workers stay in the workforce longer and retire later, more will struggle to catch up with the accelerating pace of change without these broad skills.

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Stronger corporate partnerships between traditional and new sectors like creative and hi-tech industries can increase employees’ exposure and adaptability to new workplace realities. Some job types that may be in demand by 2040 do not yet exist and could include human-centered AI ethicists, metaverse architects, socially conscious artists and creators, and sustainable food engineers.

Middle- to senior-level jobs may include AI supervisors, avatar trainers, and virtual reality customer service managers. Collaboration between industry and tertiary institutions can help introduce innovative curriculums to prepare new and existing workers.

Openness to skilled immigration is also necessary to attract talent with diverse backgrounds and ideas to help fill skill gaps and foster innovation. By 2040, the working populations in developed economies will decline by as much as 20 per cent or more. A group of Japanese public think tanks estimated that the country must quadruple the number of foreign workers to almost 7 million by 2040 to sustain the average economic growth the government has set out in its long-term projection.

To balance the employment of local workers while remaining open to external talent, the thriving tigers need to attract global entrepreneurs and businesses that create significant new local jobs. Building partnerships with local businesses and research institutions, as well as training collaborations across thriving tiger economies, can widen and deepen talent pools for each.

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The commitment of developed Asia to higher education has been instrumental in fostering upward mobility. But in these meritocratic economies, more should be done to support the middle class, which has faced downward mobility due to the rising costs of living and disrupted livelihoods, especially after the Covid-19 pandemic. Reducing the impact of worker displacement is essential, as many of these workers will face even greater employment disruption.

In the future, economies will need to rethink adjustment costs and social protection, as more workers will be self-employed, working part-time, and engaged in the informal economy. Improving coverage of private pension plans and tax incentives for people to save more for retirement are also necessary, given the limited scope of public retirement benefits in these economies. New regulatory frameworks can offer stronger employment protection such as portable insurance and worker safety for independent workers.

Office workers cross a street in Taipei, Taiwan, on July 10. Technological progress means people in developed Asia will face employment disruption. Photo: EPA-EFE

Spreading prosperity to less-prosperous cities and hubs will help address the problem of uneven growth. Urban studies theorist Richard Florida pointed out the need to attract the “creative class” engaged in knowledge-intensive industries to non-metropolitan hubs outside major cities like New York and London, to increase economic vibrancy and productivity in multiple regions in a given country.

These hubs will need to offer recreational facilities, green spaces, and culture with local flavor, while maintaining lower costs of living. Decision-makers need foresight to consult with local communities and creative professionals, to shape the design and development of these hubs.

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Additionally, developed Asian economies must remain open even when other economies are turning inwards. The thriving tigers are all, to various degrees, maintaining and embracing closer ties to large key markets including China and the Association of Southeast Asian Nations. More regional trade will expand the economic pie, even as other global ties become vulnerable. Greater policy support to facilitate access and incentives to identify innovative projects that benefit users and consumers in these markets are key.

The reality is that no economy has a road map for these thriving tigers to follow. By being imaginative and proactive, they have the chance to be trailblazers, paving the way not only for their own future but also for other economies that aspire to achieve similar economic development and continued growth.

Janet Pau is executive director of the Asia Business Council